Mortgage Rates Dip to Lowest in Month
Total mortgage applications – including for refinances and home purchases – were essentially flat last week, rising just 0.8 percent on a seasonally adjusted basis, despite mortgage rates at their lowest averages in a month. The Mortgage Bankers Association reported Wednesday that applications are now 14 percent lower than a year ago.
Refinance applications have been falling significantly over the last few weeks as interest rates have edged higher. However, refinance volume reversed course last week, increasing 7 percent for the week. The increase was largely driven by an announcement by HUD that FHA would lower its annual insurance premium by 25 basis points. MBA reported that the FHA share of total applications rose to 13.1 percent from 11.7 percent last week.
Still, “refi volume is down sharply from the end of last year, remaining 13 percent below the level from four weeks ago,” says Mike Fratantoni, MBA chief economist.
Home buyers also barely budged last week. Mortgage applications for home purchases dropped 5 percent last week and are down 1 percent from a year ago, MBA reports.
MBA reported that average 30-year fixed-rate mortgages averaged 4.27 percent last week, down from 4.32 percent the previous week.
Source: “FHA Premium Drop Ignites Mortgage Refinances, But Applications Overall Are Flat,” CNBC (Jan. 18, 2017)